The price of Bitcoin has started to soar in the early hours of Monday to almost $17K, following reports that Binance is set to establish an industry recovery fund in the wake of the FTX crisis.
The most recent tweets from Changpeng Zhao, CEO Binance, caused dramatic price jumps across the cryptocurrency market.
Zhao announced an industry recovery group to assist projects that are “otherwise solid” but are experiencing a cash issue.
He added that his company would establish an industry recovery committee to lessen the negative consequences of the impact of FTX.
“To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong but in a liquidity crisis. More details to come soon.
“In the meantime, please contact Binance Labs if you think you qualify,” he tweeted.
Details are scanty: There is no information regarding the initiatives the fund will be funding. But one thing is certain – CZ has no plans to support FTX.
Bad week for cryptos: Over the past week, Bitcoin lost 22% of its value marking its worst weekly decline since May. Analysts are scrambling to assess the outlook for digital-asset markets and potential policy ramifications amid a terrible year for the blockchain industry, worsened by the FTX scandal.
Additionally, Coinbase, a US-based crypto exchange, reportedly downsized its staff by 60 employees as a result of the FTX scandal and the market’s subsequent decline.
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Alesia Haas, the company’s Chief Financial officer, stated that if the unrest worsens in the future, the company may fire more employees. The changes, according to CFO Alesia Haas, are “surgical” measures meant to save costs amid trying times.
“We will have to take further cost-saving measures. If we sense that there is going to be further lower income and if we believe this is going to go beyond the scenarios we have already planned for.”
This situation is a catastrophe, according to experts. It is embarrassing for the sector. But it also serves as a reminder of how much of a Wild West we still live in. The impact is expected to subside in the coming weeks.